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Bonus

Kapil Dhiman (Accountant) (304 Points)

27 October 2014

Hi Sir,

i have some doubts related business expense's.

1. Bonus paid to staff on Diwali festival is taxable with salary or not?

2. On Diwali,Expense done by office on staff Diwali celebration is deductible exp or not?

3. Party and snacks for Employees welfare is deductible expense or not explain ?

4. Can a Company give loan to his employee without intrest or not explain?

Thanks in advance

Plz reply

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4 Replies

CA Parul Saxena (CA) (8438 Points)
Replied 27 October 2014

1. Yes bonus is taxable with Salary.

2.Diwali Celebration expenses are deductible.

3.Party and snacks for employees are also deductible as Staff welfare.

4.Yes company can give interest free loan to employees

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Kapil Dhiman (Accountant) (304 Points)
Replied 28 October 2014

1. One more query,Donation give by company under section 80g is deductible expense in company books or not?

2 plz Can you explain to me,the procedure for registering in PF and What amt needs to be deducted from salary and salary means.

3. how gratuity is payable by company to his employees at what ammount and It is given on paid basis or provision is for each year by the company.

Please reply

Thanks in advance

Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
Replied 29 October 2014

1) For preperation of final accounts as per Companies act you need to consider all of your expenses whether it is related to business or not but the matter is compliance. In your case you are not allowed to give any donations not relating to business if you are fresh company. if you give such donations you will be subject to penal provisions of Companies act. But you should reflect all transactions in your business, otherwise cash account will not be tallied correctly

3) Gratuity provisions will apply if employees in your organisation during preceeding 12 months touch more than 10. Gratuity will be payable to employess on retirement or superannuation if they are in continous service(Including Interrupted service as per the payment of gratuity act) for a period of more than 5years. Gratuity amount will be Half month salary for completed years of service (it will include retirement or superannuation year if service in that year exceeds 6 months) based on last drawn salary. Provision for gratuity will be disallowed as per IT rules unless it has paid on or before the return was filed u/s.139.